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Is the government trying to steal your best employees?

Government contractors are fertile ground for agencies looking to hire experienced IT professionals

By David Hubler

Aug 26, 2009

Government contractors have become fertile ground for federal agencies looking to hire experienced information technology professionals. To some, such recruiting is simply a way of finding badly needed talent; to others, it’s government poaching and needs to be controlled.

“It’s becoming a common practice because nobody can sue the government,” said an industry expert who asked not to be identified. “It’s happening especially in IT.”

“In the 20 years that I have been around this business, both in government and industry, I have never heard so much concern about it as I hear today,” said Stan Soloway, president and chief executive of the Professional Services Council and a contributing columnist for Washington Technology.

“It’s not just the recruiting and poaching of employees,” Soloway said. “It’s the targeting of individual employees in what would appear to be violations of the Merit System’s hiring and other procedures.” He said he is bothered by “the often heavy-handed tactics that are being used.”

Soloway said he knows of at least one major military command, which he declined to name, that “has a list of 750 contractor employees that they are one-by-one recruiting specifically.”

That is raising hackles with the people being recruited, “some of whom do not want to go into government,” he said. He cited one case of a federal agency hiring a contract employee by starting him at the high GS-15 pay grade.

"It raises some ethical questions for us where you have a direct business relationship, where you’re actually soliciting employees of your supplier," Soloway said. "In the commercial world it is very common to have no-solicitation clauses" in contracts.

“Companies are feeling like they’ve become a recruiting training ground for the government’s personnel system,” he said.

Moreover, the affected companies receive no compensation for the loss of their employees, he added.

Anne Reed, president and CEO of government contractor Acquisition Solutions Inc., said there have always been efforts to recruit contractor workers, but “what we’ve seen more recently is more aggressiveness” toward the practice.

“On a one-by-one basis that’s sort of the ordinary course of business,” she said. “But when it starts to get on a larger scale, then it becomes more of a challenge to manage. We’ve been fortunate that we haven’t been affected by that larger scale.”

But Reed said several of her employees have been offered government jobs at much higher positions of authority and pay grades than they have at Acquisition Solutions, and that if they remained her employees, she would not be able to bill the government for their work at those high rates.

Reed and Soloway agree that the Obama administration’s determination to bring more contracting work into the federal agencies is one factor stoking the aggressive recruiting campaign.

Reed said one of her government clients admitted getting pressure to bring work in-house even though the project was to last only 18 months. “This is exactly the kind of work that you do want to hire contractors for,” she said, adding that the agency project manager was resisting the call to insource the work.

“This is someone who is exercising good judgment in my estimation, who’s being thoughtful about it,” she said. “And that’s what I would hope, is that more often than not, people will be thoughtful about it.”

But then Reed added, “From the stories I am hearing, it’s pretty much the Wild West.”

In some cases agencies are giving prospective hires false information to suggest that their contract might be canceled, leaving them without a job, she said. “There’s an intimidation kind of thing that kicks in that I find a little distasteful. Some of our employees have been annoyed by it, quite frankly.”

The industry expert said the current recession has altered young technology professionals’ traditional view of the government as inefficient and not a good place to work. Federal agencies can offer better pay, excellent benefits including health insurance and, above all, job security, he said.

“At the same time it’s a revolving door,” he added, “because they can hire those people, but if the people don’t see the changes that were promised they [can] go back to government contracting. And they will be accepted back.”

Soloway said the situation has not reached epidemic proportions, but the contracting industry is concerned. “The numbers are not huge yet, but the early signs are very discouraging,” he said, because “It’s happening faster and more aggressively than we’ve ever seen.”

PSC and other interested organizations, including Congress, are considering ways to rein in the hiring excesses, Soloway said. “We’ve proposed there ought to be a mutual nonsolicitation agreement between industry and the government.”

Reed said other solutions might include a government agreement to pay a finder’s fee for each worker recruited from a contractor, as is commonly done in some other industries.

She said it is in government's and industry’s interest to resolve the problem as transparently as possible. “Where I see the greatest problems are when everything seems to be done in a sub rosa kind of way.”

About the Author

David Hubler is the former print managing editor for GCN and senior editor for Washington Technology. He is freelance writer living in Annandale, Va.

Reader Comments

Fri, Aug 28, 2009
Olde Sarge
Northern VA

The government will always come out ahead with a highly qualified/skilled federal employee versus a contracted body. I am a contractor and the government routinely pays these companies 2.5 times what it would actually for a government employee. Contracted employees are only justified for short term highly specialized performance. Once the contract exceeds 2 yrs, the government should reevaluate its needs and replace said contractor with an equally skilled government employee.
By the way, contractors have similar associated employment costs for benefits as the federal government--health care insurance plans, retirement plans, paid leave, sick leave, and other overhead costs--so arguing that it costs the government less over time is phony logic. The government pays all those costs through the contract rates plus profit for the company. There are no savings to the government when paying a contractor to perform a purely governmental task.
Use contractors only when that makes good sense, generally for some sort of acquisition. Otherwise, pay for regular federal employees who will cost the tax payer less over time.

Thu, Aug 27, 2009
Been There
Atlantic City

One of the problems is that agencies are actually justifying hiring contractors by claiming a cost savings; they are essentially doing A-76's illegally. I use illegal in the sense they do not have the legal authority to conduct their own version of an A-76. For instance the FAA in the past 2-3 years has hired and still in the process of converting over 300 contractors to fed employees using at least 2 different "cost studies" neither of which followed OMB and their own AMS regulations. Both of these used very faulty cost assumptions as well. I am told that a third group is in the process of doing their own “justification” to do the same for multiple contractor positions.
The article touched on other areas of potential illegality, targeting positions for specific people. Again using the FAA example, the agency and several of the managers involved "pulled" announced positions when the approved list came back without their candidate on it or in other supposed cases when individuals with veteran's preference were ranked over their not-vet. The position requirements were then re-written more tightly and re-bid. Or in other instances where there were people with Veterans preferences that scored them above the “targeted” candidate, they conducted interviews and used this to select the “most highly” qualified person.
I've also seen cases in agencies where managers created positions for children of friends, had sit down meetings with contractors to encourage them how to bid for positions, had contractors announce that they were told by a manager to bid for announced positions, etc.
More oversight in this area would be a good thing, if conducted properly. But then again, there will always be abuses and ways around new checks and balances.

Thu, Aug 27, 2009
Dave
Frederick, Md.

How do I tell the Feds. I'm available?

Thu, Aug 27, 2009
The Observer

Private industry should learn to treat their employees like humans and not dispoable, consumable resources. There is normally no commitment to provide training. Once you're no longer needed, good-bye! This is especially true when contracting. Why not accept a government job and get paid for building closures vs. work as a contractor and have to absorb the cost? BTW I am a government employee, and use to work in private industry and as a contractor.

Thu, Aug 27, 2009

I would suggest considering the following issues before arriving at a "one-size" fits all response:
--some, many? contractors are retired military and/or retired government. They do not want to go in full-time (to any job).
--some, a few, more? contractors feel frustrated that they're just sitting in seats without any real work to do. If it weren't for the money they are getting paid as contractors, they would have left earlier.
--when a project is only 18months as noted in the article, if you're going to recruit someone for a full-time/permanent position you had better have career development systems in place. If you don't they're gone--especially if they're younger workers with a career lifetime ahead of them.
--if you compare the cost of hiring a contract person for a limited duration position, is it not less expensive ultimately than to bring someone in with all the overhead, direct and indirect costs associated with that?
--if the government did a better job of workforce analytics they would know the number FTE's they need for current and projected need, what succession plan is in place, and what needs to be done to develop employees through a systematic career program. Then, there can be real justification for other than ft-career conditional positions. The Acquisition Workforce is suffering the great pains of not doing enough to build a pipeline of talent. No wonder they rely on contractors.
--finally, has anyone ever figured out what the real cost of "double dipping" is to the local and national economy? When people are unemployed or underemployed, does it really make sense to pay retirees to come back in? Or, pay people who already have two to three vested retirement programs--and they're looking for one more? Why not put some of that money into developing the talent you really need?

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